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Is the RBA About to Raise Rates into a Falling Property Market? Join Ben Kingsley & Evan Lucas LIVE

Six weeks ago, the question was whether the Reserve Bank would need to hike again this year.

The consensus has shifted, and quickly.

All four major banks now expect an increase to be announced on 29 September. ANZ has gone further, forecasting back-to-back rises in September and November, which would take the cash rate to 4.85% — a level Australia hasn’t seen since 2008.

And here’s what makes this meeting particularly interesting: The RBA could be tightening again into a housing market that has already been falling for five consecutive months.

What changed?

Oil. Global energy prices have risen sharply again, adding another inflation risk at a time when underlying inflation is already above the RBA’s target.

The Governor’s language. Appearing before the House of Representatives Standing Committee on Economics on 18 September, Michele Bullock said that although growth in the Australian economy is slowing, some of the upside risks to inflation identified at the August meeting now appear to be materialising.

She pointed to the ongoing Middle East conflict, rising energy costs, the global AI investment boom and extreme weather events as sources of additional price pressure.

Importantly, the RBA has not pre-committed to another increase. But the argument for one has clearly strengthened.

Where the banks have landed

  • NAB was the first major bank to move to a September rise
  • Westpac and CBA have since brought their calls forward to September, with all four majors now forecasting a 0.25 percentage point increase to 4.60%
  • ANZ has gone further, forecasting another 0.25 percentage point rise in November, which would take the cash rate to 4.85%

What’s going on with property?

While inflation remains stubborn, housing conditions have been weakening.

Cotality’s Home Value Index fell 0.9% in August, marking the fifth consecutive month of decline and taking national home values 3.6% below their March peak. Across the capital cities, 93% of suburbs recorded a decline in value through winter.

The downturn has been particularly pronounced at the higher end of the market. Upper-quartile house values are now 10.7% below their peak in Sydney and 10.5% below peak in Melbourne, while properties at more affordable price points have generally proven more resilient.

Homes are also taking longer to sell, vendor discounts have widened, and total listings are higher than they were a year ago. Auction clearance rates briefly improved to 58.5% in mid-September, although that remains well below the 69% recorded at the same time last year.

What to take away from this

The RBA is facing a difficult balancing act as it needs inflation to come down. But further tightening would be occurring when the housing market (and many household budgets) are already showing the impact of the rate increases delivered earlier this year.

For anyone with a mortgage or thinking about buying, that changes the planning question. It’s no longer simply “When will rates come down?“. It’s “How much further could they go up, and does my position still hold if they do?”

Three things to think about this week:

  • Your buffers. If your household cash flow currently works at 4.35%, what happens if the cash rate reaches 4.60%… or 4.85%? You don’t need to predict the exact outcome. But you should know how much room you have.
  • Your borrowing capacity. Lenders assess serviceability using your actual loan rate plus an additional buffer. Further rate rises can therefore reduce borrowing capacity, even if your income and deposit haven’t changed. If you were pre-approved earlier this year, it may be worth checking whether those numbers still hold.
  • Opportunities within a weaker market. Falling values, higher stock levels, and softer competition can improve negotiating conditions for buyers who are financially well positioned. That doesn’t mean every falling market is automatically a buying opportunity. Property selection, location, cash flow and your broader strategy still matter enormously.

Join us LIVE on Tuesday

We’re going live on YouTube on Tuesday, 29 September, with Ben Kingsley joined by Evan Lucas — behavioural economist, market commentator and author of Mind Over Money.

They’ll set the scene beforehand, cover the RBA decision live as it lands at 2:30pm AEST, unpack the Board’s statement in real time, and then widen the conversation to look at inflation, the labour market, the property market and what’s happening across the US, China and Europe.

Set a reminder for the live stream →

If the video above hasn’t refreshed by 2pm, head directly to our YouTube channel to join the conversation.

Is your position still solid?

Our Mortgage Broking team can review your current loan, stress-test your position, and help you understand whether there may be an opportunity to negotiate with your lender, refinance or restructure. The review is free, and there’s no obligation to make a change.

Which professional would you like to meet with?

 

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